According to the EIA in 2012, Russia holds the world's second largest recoverable coal reserves, with 173 billion short tons (behind only the United States, which holds roughly 263 billion short tons). Russia produced 372 million short tons in 2011, and consumed roughly 262 million short tons, making it the sixth-largest producer and consumer of coal in the world. Most of Russia's coal is produced using through open cast mining, and 76 percent of the coal produced is hard coal.[1]

Russian coal production increased substantially in 2011, following a restructuring of the sector, reaching the highest post-Soviet production level. More than 80 percent of domestic coal production comes from independent producers.[1]

The government's Coal Industry Development Program projects that by 2030, national coal production will grow to 430 million tons, with coal mined at 82 open cast mines and 64 subsurface mines.[2] The EIA states that as of 2012 Russia is planning new coal plants, allowing it to use less and thus export more natural gas.[1]

History

According to U.S. Energy Information Administration statistics, Russia produced 321 million short tons of coal in 2006 (roughly a quarter of U.S. coal production), making it the fifth largest in the world. The country consumed roughly 260 million short tons, leaving 61 million short tons for export. According to the government's energy strategy, Russia should produce between 441 and 496 million short tons by 2020. Almost 80 percent of domestic coal production comes from independent producers.[3]

Russian coal production began a three-year upswing in 1999, part of the Russian government’s strategy to increase coal production and build more coal-fired plants to reduce demand for natural gas, so that the country can export more natural gas. As of September 2010, there is currently a proposal to reduce the excise duty on coal production by 50 percent. This would also involve a tax system with diversified rates designed to replace gas with coal at power stations and reduce gas consumption.[3]

Coal production

Mines

As of 2013, Russia’s coal industry comprises over 240 coal mining operations, including 96 underground mines and around 150 surface mines, accounting for total production of about 360 million tons of coal per year. The individual shares of the major coal mining areas in national coal production are: Kuznetsk basin: 52%; Kansk-Achinsk basin: 12%; Pechora basin: 5%; East Donets basin: 3%; and South Yakutsk basin: 3%.[2]

Proposed projects

In March 2012, Bloomberg reported that OAO Severstal, Russia’s second- largest steel producer, was among four companies planning mines and a state-backed railroad in the Siberian region of Tyva that would double the country’s metallurgical coal exports to 40 million metric tons by 2020. The projects proposed by the four companies and the railroad partly funded by the state may cost about $8 billion. Evraz Plc (EVR), Russia’s largest steelmaker, Severstal, billionaire Oleg Deripaska’s En+ Group and shareholders of Russian Copper Co. have bought licenses for coal deposits in the Tyva region since 2008.[4]

Russia exports to China

Note: 1 metric ton (tonne) = 1.10231 short tons

In 2009, Russia exported 12.09 million tonnes of coal to China, up 1,500% over 2008.[5] In 2010, Russia shipped 32 million tons to India, Taiwan, South Korea, Japan and China;[6] during the first half of 2010, Russia exported 6 million tonnes of coal to China, making it currently the fourth-largest coal exporter to China. Russia plans to increase annual coal exports to China to 15 million tonnes for the next five years, then increase exports to 20 million tonnes per year for the next 20 years;[5] overall, Russian officials have said they want to more than double coal exports to Asia to an annual 85 million metric tons by 2030.[7]

Russia has also signed trade agreements with China to provide for the joint-ventured development of the Ogodzhinskoye coal deposit in the Amur region in Russia's Far East, which borders China.[5]

September 2010: Coal deal reached with China

In September 2010, it was announced that Russia had agreed to supply China with 475 million tonnes of coal over the next 25 years. In the deal, China will provide Russia with a $6 billion loan to finance the development of several coal projects into large-scale mines. The announcement followed a conference on energy cooperation in Blagoveshchensk, attended by Sergei Shmatko, Russia's energy minister, and Zhang Guobao, director of China's National Energy Administration. The Russian ministry stated: "Agreements have been reached on supplies of at least 15 million tonnes of [Russian] coal to China over the next five years and at least 20 million tonnes per year afterward. China's $6 billion loan will be secured by the Russian coal exports. The money will be used for everything from mine development and construction to the building and expansion of transportation infrastructure."[5]

Russia and China also agreed to conduct a preliminary feasibility study to set up another joint-venture for the development of a coal-to-liquids project in Russia.[5]

Coal plants

Proposed coal plants

Government plans for 2020 would increase the proportion of coal-fired plants in the national fuel mix from 25% to 37%, and decrease the share of natural gas from 70% to 58%.[2]

Environmental and health effects

Condemned: Russian coal industry displaces Siberian indigenous people

Air pollution

Since 2013, dust and gas emissions from the coal mining industry have more than doubled, reaching 549,000 tons over a level of 233,000 tons ten years ago. Emissions of fine suspended particles and sulfur dioxide by many coal-fired generating units in Russia are about 10 times higher than at coal-fired power stations in the European Union, due to a lack of pollution controls like scrubbers. The average concentration of solid particles in the air of cities in the eastern part of Russia is 30% higher than in European Russia (143 micrograms per cubic meter and 110 micrograms per cubic meter, respectively). The permissible limit established in Russia is 150 micrograms per cubic meter.[2]

Coal waste

In the Kemerovo Region, coal mining is responsible for over half of all wastes (55%).[2]